Hydrofarm Holdings Group, which sells hydroponics and specialty indoor gardening supplies, announced terms for its IPO on Tuesday.
The Petaluma, CA-based company plans to raise $130 million by offering 8.7 million shares at a price range of $14 to $16. Insiders intend to purchase $30 million worth of shares in the offering. At the midpoint of the proposed range, Hydrofarm Holdings Group would command a fully diluted market value of $520 million.
Hydrofarm is a leading independent distributor and manufacturer of controlled environment agriculture equipment and supplies, primarily serving the US and Canadian markets with a main focus on the cannabis industry. The company reaches commercial farmers and consumers through a network of over 2,000 wholesale customer accounts, connected primarily through its proprietary eCommerce marketplace. Over 80% of its net sales are generated from specialty hydroponic retailers, but it also distributes products to a diversified range of retailers including garden centers, hardware stores, eCommerce retailers, commercial greenhouse builders, and commercial resellers.
Hydrofarm's products are used to grow, farm and cultivate, among other plants, cannabis. The company believes that it sits at the intersection of two compelling market opportunities: the movement towards or achievement of cannabis legalization across North America, and a revolution in controlled environment agriculture. Since the US presidential election, cannabis stocks have risen.
Hydrofarm Holdings Group was founded in 1977 and booked $309 million in revenue for the 12 months ended September 30, 2020. It plans to list on the Nasdaq under the symbol HYFM. J.P. Morgan, Stifel, Deutsche Bank, Truist Securities and William Blair are the joint bookrunners on the deal. It is expected to price during the week of December 7, 2020.
